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In recent past the regulatory framework has improved for exporting U.S. defense equipment and services to
Vietnam, opening up notable commercial opportunities for American firms.
U.S. Commercial Service Vietnam
29 April 2010
Defense Market Opportunities in Vietnam

In recent past the regulatory framework has improved for exporting U.S. defense equipment and services to Vietnam, opening up notable commercial opportunities for American firms. Previously deterred by the U.S. government prohibition on exports and sales of defense equipment to Vietnam, no licenses, other approvals, exports or imports of defense articles and defense services destined for or originating in Vietnam was accepted prior to 2007.

Changes in U.S. law and regulations governing defense equipment, bolstered by Vietnam’s entry into the World Trade Organization (WTO), the US-Vietnam Bilateral Trade Agreement (BTA), and especially the December 2006 U.S. Presidential Determination are leading to a more transparent and open market for U.S. products. As a result, prospects for engaging in defense equipment and services sales in Vietnam are expected to become much more attractive.

Market Demand

In recent years, Vietnamese political and military leaders have given priority to preventing the further deterioration of its stock of military weapons and equipment. Vietnam has sought out sources of spare parts and foreign assistance to maintain, refurbish and upgrade its defense equipment inventory. As a secondary priority, Vietnam has also sought access to relevant modern military technology and its transfer to Vietnam’s own national defense industry through joint ventures and co-production. In trying to attain these twin objectives – maintenance and modernization – Vietnam has been constrained by cost, compatibility and U.S. national security trade restrictions.

Other areas of priority for the Vietnamese military are the protection and surveillance of its coastline, which stretches the entire length of the country (3,444 km), and search and rescue operations. In recent years, the Vietnamese military has played an increasingly important role in prevention and rescue efforts related to natural disasters (hurricanes, flooding, landslides, etc.) and humanitarian response.